April 26 - Pepsi is in the midst of a big transition to boost its business and better compete with Coca Cola, and there are signs the changes are starting to pay off. Bobbi Rebell reports.
The sparkle may be coming back to the top contenders in the cola wars. That comes despite data from Beverage Digest showing 7 years of decline in carbonated soft drinks. Pepsi turned in better-than-expected quarterly results, on the heels of strong numbers from rival Coca-Cola. When Coke released its figures mid-April, it said consumers were eating out and traveling more; for its part, Pepsi said it expects business to strengthen as the year progresses. But PepsiCo remains a distant second to rival Coca Cola- which holds a commanding 42 percent of the market compared to Pepsi's 29 percent, according to Beverage Digest. Pepsi is in the midst of a transition- spending more money on advertising and creating new products. Jonathan Feeney, Senior Beverage Analyst at Janney Montgomery Scott: SOUNDBITE: JONATHAN FEENEY, SENIOR FOOD AND BEVERAGE ANALYST, JANNEY MONTGOMERY SCOTT (ENGLISH) SAYING: "They don't need to move up and supplant Coca Cola as the #1. If they want to improve their market share broadly they should do so by growing the category and they are going to grow the category through spending behind good innovations." Pepsi's marquee drink is third on the list behind Coke and Diet Coke, when it comes to the top five soda brands. But new comer Pepsi Next- a mid-calorie cola- could be the next shot in the cola wars. SOUNDBITE: JONATHAN FEENEY, SENIOR FOOD AND BEVERAGE ANALYST, JANNEY MONTGOMERY SCOTT (ENGLISH) SAYING: "I think maybe a Pepsi drinker might be a bit more amenable to get the same sweetness at a reduced calorie you know profile than maybe Coca Cola was with C2 so I hold out some hope. I mean any innovation is good for the carbonated soft drink category." And consumers appear ready to buy into that innovation. Pepsi was able to raise prices last quarter, boosting revenues by four percent. Bobbi Rebell, Reuters.